MREIMGRAKAITNIOG NE,C ONOMICS: DEMIAINSEPNOTR APOSS AT-NWDA RC IETCIZOENNOSMHIISPTS James M. Buchanan A Theorist of Political Economy and Social Philosophy Edited by Richard E. Wagner Remaking Economics: Eminent Post-War Economists Series Editor Robert A. Cord Independent Researcher London, UK More information about this series at http://www.palgrave.com/gp/series/14508 Richard E. Wagner Editor James M. Buchanan A Theorist of Political Economy and Social Philosophy Editor Richard E. Wagner Department of Economics George Mason University Fairfax, VA, USA Remaking Economics: Eminent Post-War Economists ISBN 978-3-030-03079-7 ISBN 978-3-030-03080-3 (eBook) https://doi.org/10.1007/978-3-030-03080-3 Library of Congress Control Number: 2018959880 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover credit: The Washington Post/Contributor This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Introduction from the Series Editor Economics has witnessed a dramatic transformation since the Second World War, both in terms of its depth and range. This series of volumes, entitled Remaking Economics: Eminent Post-War Economists, will examine the nature of this transformation through the work of those economists who have been responsible for the changes that have taken place. In some cases, relatively little has been written about these transformative figures in terms of single edited volumes dedicated to examining their work and influence. The series hopes to fill this gap with volumes edited by important economists in their own right, with contributions in each volume not only from some of the most prestigious scholars currently working in economics but also from promising younger economists. By addressing key themes and retaining a focus on originality, each vol- ume will give the reader new and valuable insights. The series will also strengthen economists’ knowledge of the history of their subject and hopefully inspire future research. Robert A. Cord Managing Editor v Preface Economic theory underwent a substantial transformation in the after- math of the Second World War, both in its methods and in substance to which those methods were applied. This volume is the third in a series that examine the ideas of the main figures who led that transformation. This volume is devoted to James M. Buchanan, who received his Ph.D. from the University of Chicago in 1948 and who was awarded the Nobel Memorial Prize in Economics in 1986. The 50 essays in this vol- ume are organized into seven parts, with the titles of those parts reflect- ing the breadth of Buchanan’s body of scholar work. In turn, these parts are dedicated to “subjectivism and the methodology of political econ- omy,” “public finance and the theory of the state,” “collective action and constitutional political economy,” “ethics, social philosophy, and liberal political economy,” “economic theory as social theory,” “money, debt, and the rule of law,” and “Buchanan in relation to other prominent scholars.” While Buchanan is now a historical figure, these essays are not hag- iographic in nature. To the contrary, they mostly focus on the poten- tial contemporary relevance of Buchanan’s ideas. The achievement of that potential relevance will require the application of a theorist’s vii viii Preface imagination to topics that Buchanan explored, and the authors of these essays are mostly concerned with exploring how one or another of Buchanan’s many lines of inquiry might be carried productively into contemporary scholarly inquiry. Fairfax, USA Richard E. Wagner Contents 1 Who Was James M. Buchanan and Why Is He Significant? 1 Richard E. Wagner Part I Subjectivism and the Methodology of Political Economy 2 What Should Economists Do Now? 13 Robert Sugden 3 Starting from Where We Are: The Importance of the Status Quo in James Buchanan 39 Michael C. Munger 4 James Buchanan and the Properly Trained Economist 65 Peter J. Boettke and Rosolino A. Candela 5 James Buchanan and the “New Economics of Order” Research Program 85 Stefan Kolev ix x Contents 6 Emergence, Equilibrium, and Agent-Based Modeling: Updating James Buchanan’s Democratic Political Economy 109 Abigail N. Devereaux and Richard E. Wagner Part II Public Finance and the Theory of the State 7 The Conflict Between Constitutionally Constraining the State and Empowering the State to Provide Public Goods 133 Lawrence H. White 8 Fiscal Constitutions, Institutional Congruence, and the Organization of Governments 147 Charles B. Blankart and David C. Ehmke 9 The Irrelevance of Balanced Budget Amendments 169 David J. Hebert 10 Subsidizing Health Insurance: Tax Illusion and Public Choice for a Mostly Private Good 187 Mark Pauly 11 Inconsistencies in the Finance of Public Services: Government Responses to Excess Demand 205 Andrew Abbott and Philip Jones 12 The Unproductive Protective State: The U.S. Defense Sector as a Fiscal Commons 235 Christopher J. Coyne and Thomas K. Duncan 13 Contraception Without Romance: The Entangled Political Economy of State and Federal Contraceptive Insurance Mandates 263 Marta Podemska-Mikluch